Cortburg Speaks Retirement

Should You Roll Over Your 401(k)? What to Know Before You Decide

• Miguel Gonzalez, MBA, AIF®, CPFA®, CRC® • Season 2024 • Episode 245

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 If you're changing jobs or heading into retirement, you might be wondering whether to roll over your 401(k). In this episode, Miguel Gonzalez breaks down the pros, cons, and key factors to consider before making a move. 


Cortburg Retirement Advisors is a boutique financial planning firm committed to helping you grow, protect, and preserve your assets from your first job to retirement. We specialize in wealth management, estate and tax planning, group retirement, employee benefits, insurance, and retirement planning to navigate any economic climate.

Miguel Gonzalez, a Retirement Specialist with 20+ years of experience, offers expertise in retirement income planning, investment management, and retirement plan design. With an MBA from Columbia Business School, and professional experience with JP Morgan Chase, Merrill Lynch, and more, Miguel is a trusted advisor for his clients.


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Welcome to Cortburg Speaks Retirement Podcast
with Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®

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Welcome to Cortburg Speaks Retirement

An audio podcast about investing in the stock market, financial planning, money management and retirement planning.  Each Wednesday, we help investors at all stages of life learn how to potentially grow and preserve their money from first job through retirement.

Now here is your host, Miguel Gonzalez.


Good morning and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.   

This week, let’s talk about an important financial decision many people face when changing jobs or retiring:

Should I roll over my 401(k)?

If you've ever left a job—or plan to retire soon—understanding your rollover options is key to preserving and growing your retirement savings.

What is a 401(k) Rollover?

A rollover is when you move money from a 401(k) into an IRA or another employer-sponsored retirement plan. The goal is to maintain the tax-deferred status of your retirement savings while consolidating your accounts and possibly gaining more investment options.

Why Consider a Rollover?

Here are a few common reasons people roll over their 401(k):

•           More investment options: Most 401(k) plans offer a limited selection of funds. Rolling over into an IRA can give you broader access to stocks, bonds, ETFs, and more.

•           Simplification: If you’ve changed jobs several times, you may have multiple 401(k) accounts scattered across employers. Consolidating can help keep your finances organized.

•           Lower fees: Some IRAs may offer lower expense ratios or account fees compared to old employer plans.

•           Better control: IRAs allow more flexible withdrawal strategies and estate planning options than some 401(k) plans.

What Are the Risks?

Before rolling over, it’s important to weigh the trade-offs:

•           Loss of creditor protection: 401(k)s may offer stronger protection from creditors under federal law than IRAs do under state law.

•           Plan-specific benefits: Some 401(k)s allow penalty-free withdrawals if you separate from service at age 55 or older. IRAs require you to wait until 59½ to avoid early withdrawal penalties.

•           Required Minimum Distributions (RMDs): While IRAs and 401(k)s both require RMDs starting at age 73, keeping money in a current employer’s 401(k) (if you’re still working) could delay RMDs.

Direct vs. Indirect Rollovers

Whenever possible, opt for a direct rollover—where funds go straight from your old plan to your new IRA or 401(k). This avoids taxes and penalties.

With an indirect rollover, the funds are sent to you first, and you have 60 days to deposit the money into another account. If you miss that deadline—or don’t deposit the full amount—you could owe income taxes and a 10% early withdrawal penalty.

Should You Rollover?

Whether a rollover makes sense depends on:

•           Your age and employment status

•           Your current and future tax situation

•           Your investment preferences

•           Your long-term financial goals

This is a big decision, and it's wise to talk to a financial professional who can walk you through your options and help avoid costly mistakes.

In Closing

Rolling over your 401(k) can be a smart move—but it’s not a one-size-fits-all solution. Understanding your options, the rules, and the timing can help you make the most of your retirement savings.Make sure to visit our website, www.CortburgRetirement.com. Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances.  As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.

This is Miguel Gonzalez, Certified Retirement Counselor (CRC) and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational podcast.  

 

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Miguel Gonzalez, MBA, AIF®, CPFA®, PPC®, CRC®

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